Stimson in the News

Yun Sun is quoted in Wall Street Journal on Chinese investment on Myanmar

in Program

October 10, 2013

Chipping away at an image of state-owned Chinese companies’
being quiet investors, one Chinese mining company is embarking on a
public-relations and social-spending spree in Myanmar, attempting to revive a
business relationship that cooled after environmental protests by local
communities shut down the company’s operations.

The company-Wanbao Mining Ltd., a subsidiary of state-owned
Chinese arms manufacturer China North Industries Corp.-has promised more than
$1 million a year in social investments in villages around the mining site. The
company also will funnel 2% of profits toward corporate social-responsibility
projects once the mine is in operation, in what analysts say is a conspicuous
and unusually generous social investment for a Chinese company.

As Myanmar transitions from military to civilian rule, these
companies, along with Chinese diplomats, are rethinking their Myanmar strategy
as residents express their newfound freedoms by voicing opposition to certain
development projects, largely seen by locals as exploitive and a threat to
their agriculture-based livelihood.


“Such a dramatic change of profit-sharing, unfavorable
to the foreign investor, is highly unusual-especially for China,” said Yun
Sun, a fellow at the Washington-based Stimson Center, in a recent report.

It remains to be seen whether Wanbao’s steps will be
replicated across the country, or help bolster confidence of Chinese investors
looking for opportunities there. Chinese investments in Myanmar have fallen
dramatically over the past year, from approximately $12 billion between 2008
and 2011 to $407 million in the 2012 fiscal year ending in March, and analysts
say this volume is unlikely to pick up soon.

To read the full article, click here.


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